Textbook Tax

Cryptocurrency transactions, while anonymous and decentralized, are subject to regulation by the IRS for all US taxpayers. Because of this, no matter your level of knowledge or complexity of dealings, if you have or plan to participate in any activity involving cryptocurrency, please continue reading to learn about the common taxable and non-taxable cryptocurrency transactions. By understanding how the United States taxes each crypto-related transaction, you will be a better crypto investor and trader and have a better understanding of your tax bill come tax season. Let’s start discussing the taxable and nontaxable cryptocurrency transactions based on US regulations. Crypto Tax: Taxable Transactions The following crypto transactions trigger capital gains or losses and may result in capital gain tax owed based on your capital asset activity. 1. Sell cryptocurrency for real currency When you sell cryptocurrency for USD, you have made a taxable crypto transaction. In other words, if you e...

You may claim the home office deduction on your tax return if you used part of your home for business. U.S. tax law allows you to deduct expenses related to the business use of your home on your tax return. The tax deduction applies to both homeowners and renters as well as all types of homes. You determine the amount of expense related to business use based on a standard rate provided by the IRS or a calculated rate established by the percentage of your home utilized specifically for business. The two requirements to claim the home office tax deduction include: (1) regular and exclusive use and (2) principal place of your business. Because the COVID-19 pandemic required millions of people to work from home during 2020, many people are wondering if they can claim the home office tax deduction on their 2020 tax return. Below, I will explain in detail the home office deduction requirements to help you determine if you can deduct home office expenses on your tax return. Fair warning,...

Before the COVID-19 shutdown, the ability and choice to work remotely from home was growing in popularity. The popularity of remote work continues to grow thanks to advances in telecommunication technologies, which allow individuals to work remotely outside a traditional office environment while still remaining personally and collaboratively productive. Now, as the entire workforce proved its ability to successfully work from home during the shutdown, I expect exponential growth in remote work offerings. Because of remote work culture, we will see an increase in the number of people working remotely for companies that are based in different states. Remote work outside of your company's state will affect your tax situation. Below, I will explain how and where you pay taxes if you work remotely. Related Posts -  Unemployment Income: What to know about unemployment income if you've been laid off or furloughed -  Understanding your Form W-2 -  State Tax Refunds: Are sta...

It is very possible that you live in one state and work in another. If so, you may face some confusion while filing your tax return. State laws may require you to file a tax return in multiple states, increasing your chance of error during the tax return process. Other situations may also require you to file a tax return in multiple states, including but not limited to moving during the tax year or having a short term job/internship in another state during the tax year. If you work in one state and live in another or face a similar situation, please continue reading below to learn about the tax reporting requirements of living in one state and working in another. Related Posts -  File your taxes online for free: The IRS Free File Program -  State Tax Refunds: Are state tax refunds taxable? -  Four reasons why you should file your tax return early -  Tax Tips for Bloggers: Four things every blogger should know What are the tax filing requirements when wor...

The U.S. tax return filing due date is April 15 each year. Additionally, you may choose to file an extension that extends your tax return filing due date to October 15 (Please see  Tax Extension: How to file a tax extension? ). Because of COVID-19 and the related economic shutdown, the IRS granted all U.S. taxpayers with April 15 due dates an automatic tax return filing extension to July 15 (Please see  Coronavirus (COVID-19) Tax Impact - Relief from timely filing of 2019 Federal income tax returns ) . However, while your tax return is now due on July 15, you should still file your 2019 tax return early. Like any task, it may be tempting to procrastinate filing your tax return, but by doing so, you may face issues later on relating to your taxes and information. Therefore, you should file your tax return as soon as possible. Below are four reasons why it is beneficial to file your tax return early. Related Posts: -  The Complete List of Tax Credits for Individu...

As virtual currency trading and ownership continues to grow, the U.S. regulatory policies and guidance remain vague, confusing, and inconsistent. However, based on current law, tax planning methods exist to help you lower your crypto tax bill. In the current regulatory environment, a tax loophole, or a tax planning strategy to legally reduce your tax liability, exists for crypto traders. The tax strategy focuses on the applicability of the Wash Sale rule as it relates to trading cryptocurrencies. It is important to note that the regulatory environment surrounding virtual currency is rapidly evolving, and so, crypto traders should remain up to date on newly released crypto guidance and policy. Below, I will detail the wash sale rule as it relates to trading crypto as well as explain the tax strategy for lowering your cypto tax bill. Every crypto trader should know the wash sale tax tip. Related Posts -   Cryptocurrency Taxation: How does the U.S. tax cryptocurrency? -  Ta...

As the U.S. economy continues to rapidly deteriorate, approximately 17 million Americans have filed for unemployment in the past four weeks. Just last week alone, approximately 6.6 million Americans filed unemployment claims. I expect these unprecedented times to continue as the worldwide economic shutdown continues with no end in sight. Related Posts -  Tax Refund Schedule: When should I receive my tax refund from the IRS? -  Rental of Residence: How to rent your house tax-free? -  How to determine your tax filing status? -  Must know tax rules relating to your IRA In response to the pandemic and related economic shutdown, the U.S. government passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act expanded unemployment benefit relief. Namely, the CARES Act expanded the unemployment eligibility definition and increased the unemployment benefit by $600 per week for four months. Because of the increase in unemployment clai...

The U.S. Treasury Department and the IRS have officially extended the tax filing due date from April 15, 2020 to July 15, 2020. This extension applies automatically to all taxpayers with an original April 15 tax filing due date. For more information, please read  Coronavirus (COVID-19) Tax Impact - Relief from timely filing of 2019 Federal income tax returns . Tax filing season is in full swing. As stated in the disclaimer above, the disruption caused by COVID-19 resulted in the Treasury Department and IRS automatically extending the U.S. tax filing due date from April 15, 2020 to July 15, 2020. While this automatic extension allows you more time to file your tax return, why wait? Related Posts -  The Complete List of Tax Credits for Individuals - Are state tax refunds taxable? -  How to file a tax return for your kids when they make money in 2019? -  IRA Income: Must know tax rules relating to your IRA The IRS begins accepting tax returns ne...

After much debate, Congress passed the highly-discussed stimulus package on March 27, 2020. The $2.2 trillion coronavirus stimulus package, named the CARES Act, includes aid to Americans via direct cash assistance, additional unemployment income, and additional business tax credits. Because the CARES Act is a 880 page legislative document, I thought it would be helpful to provide a quick summary detail about the stimulus package. Namely, I will focus on the direct cash assistance portion of the bill as this seems to be the area that interests most individuals. So, if you want to learn about the stimulus checks, please continue to read below where I answer some frequently asked questions about the coronavirus stimulus check including: Will I get a stimulus check from the coronavirus stimulus package? Am I eligible for the stimulus check? When will I receive the stimulus check? How to maximize my stimulus check? Related Posts: -  Tax Tips for Bloggers: Four things ev...

The Coronavirus (COVID-19) pandemic has officially disrupted the 2019 tax filing season. On March 13, 2020, President Trump issued an emergency declaration under the Disaster Relief and Emergency Assistance Act. The emergency declaration instructed Steven Mnuchin, the Secretary of the Treasury, to provide tax deadline relief to Americans affected by the COVID-19 pandemic under section 7508A(a). As a result, on March 18, 2020, the Department of the Treasury and the IRS released Notice 2020-18, which superseded and restated its earlier Notice 2020-17. The Notice provides relief to "affected taxpayers," which I will detail below. Related Posts: -  File your taxes online for free: The IRS Free File Program Explained -  Tax Extension: How to file a tax extension? -  Understanding your Form W-2 -  Five easy steps to lower expenses and decrease spending in 2020 -  Coronavirus (COVID-19) Tax Impact - Will you get a stimulus check? Explaining the $2 trillion stimu...

The blogging profession has expanded rapidly in the past several years. Because of the popularity of blogging, it is important that the blogging community understands the tax laws that apply to the profession. Like any other job, when you earn money from your blog, you must report and pay taxes on the income. While you may be employed by a blog, generally speaking, most individuals in the blogging community are self-employed bloggers; therefore, it is crucial for you as a blogger to understand the tax laws surrounding self-employed individuals. Below, I will detail four tips that every blogger should know about their tax situation. Those tips include estimated tax payments, self-employment tax, business versus hobby analysis, and deductible expenses. Related Posts: -  The Complete List of Tax Credits for Individuals -  Tax guidance on virtual currency transactions -  Take advantage of a declining market by saving on taxes Tips for Bloggers: Four things ev...

It is officially tax season, meaning you can now file your 2019 tax return! By this point, you should have received your W-2 ( Understanding your Form W-2 ) and/or Form 1099 from your employer(s), and so, you can now file your 2019 tax return at your convenience until the tax return deadline of April 15. However, as always, you do have the option to file a federal tax extension to extend your filing deadline to October 15. Related Posts -  The Complete List of Tax Credits for Individuals -  Dependency Definitions: What is a qualifying child and a qualifying relative? -  Take advantage of a declining market by saving on taxes -  Guide to Taxable Income for Individuals How do I file a tax extension? As stated, the IRS offers a tax extension to all taxpayers regardless of any reason for needing the tax extension. The tax extension gives you an additional six months to file your federal tax return, extending the filing deadline from April 15 to October 15 (d...

It is time to file your taxes! While most people dislike filing their tax return, all people like receiving a tax refund. The sooner you file your taxes, the sooner you get a potential tax refund! If you are eligible for a tax refund, that means you overpaid/over-withheld taxes during the tax year. In other words, your actual tax liability is less than the estimated tax you paid during the year. In order to properly calculate your actual tax liability at year end, you must remember to claim all your eligible tax deductions and tax credits on your tax return. Doing so will decrease your taxable income and taxes owed. A tax credit is a tax break for qualified taxpayers that reduces dollar for dollar the amount of tax you owe. Therefore, tax credits have a more significant impact on your tax liability than tax deductions. Below, I will detail the Lifetime Learning Tax Credit. Find out if you qualify for the educational tax credit! Related Posts -  The Complete List of Tax Cr...